Vancouver, British Columbia–(Newsfile Corp. – May 16, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company” or “EMX”) is pleased to report results for the quarter ended March 31, 2022 (“Q1 2022”). The Company’s filings for the quarter are available on SEDAR at www.sedar.com, on the U.S. Securities and Exchange Commission’s website at www.sec.gov, and on EMX’s website at www.EMXroyalty.com. Financial results were prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board.
HIGHLIGHTS FOR Q1-2022
Financial Update
All dollar amounts in this news release are Canadian dollars (CDN) unless otherwise noted.
Adjusted revenue and other income[1] of $3,369,000 included $1,154,000 in income from the effective Caserones copper royalty interest in Chile.
Royalty generation costs of $5,397,000 of which the Company recovered $2,695,000 from partners.
General and administrative costs totaled $2,688,000. Impacting general and administrative costs, were higher professional fees, relating to the Barrick settlement of the Bullion Monarch litigation in the US, as well as the payment or accrual of annual compensation awards and adjustments.
Share-based payments totaled $626,000 compared to $542,000 in Q1 2021. The aggregate share-based payments relate mainly to the fair value of restricted share units (“RSUs”) vested during the period.
Finance expenses of $1,787,000 associated with the Sprott Credit Facility and the SSR VTB note. The Company also recognized a gain on modification of the Sprott Credit Facility of $5,008,000 resulting from an extension of the maturity date.
For the quarter, the Company had a loss from operations of $4,427,000 and net income of $23,547,000.
Adjusted cash provided by operating activities1 of $20,928,000.
Other significant items affecting income for the three months ended March 31, 2022 included $23,846,000 of net proceeds received (after settlement of legal fees) relating to the Barrick settlement with Bullion Monarch, unrealized fair value gains on investments of $6,329,000, deferred income tax expense of $5,339,000, and foreign exchange adjustments of $1,038,000.
As at March 31, 2022, the Company had cash and cash equivalents of $44,970,000, investments, long-term investments and loans receivable valued at $30,511,000, and loans payable of $59,226,000.
Corporate Updates
Suspension of Filing of Notice of Arbitration EMX suspended the filing of its Notice of Arbitration to Zijin Mining Group Ltd (“Zijin”) and commenced discussions with Zijin with the goal of reaching a mutually acceptable resolution.
Settlement of the Bullion Litigation The Company’s wholly-owned subsidiary, Bullion Monarch Mining, Inc., (“Bullion”) reached a settlement with Barrick Gold Corporation (“Barrick”) and Barrick affiliates and subsidiaries (“Barrick Entities”) with respect to Bullion’s claim of non-payment of royalties by the Barrick Entities to Bullion on production from properties in the Carlin Trend, Nevada. Bullion initiated litigation in 2008, before EMX acquired Bullion in 2012. Pursuant to the settlement, Barrick paid Bullion US$25 million. Of the US$25 million settlement, US$6.175 million was paid as a fee to Bullion’s Reno, Nevada lawyers. The settlement of the lawsuit does not affect our 1% gross smelter return royalty from portions of Nevada Gold Mine’s Leeville, Carlin East, Four Corners, and other northern Carlin Trend underground gold mining operations (the “Leeville Royalty”), which will continue to be paid.
Acquisition of Additional Royalty Interest on Caserones Subsequent to Q1, EMX acquired an additional (effective) 0.3155% Net Smelter Return (“NSR”) royalty on the Caserones Copper-Molybdenum Mine located in northern Chile for US$25.74 million. When combined with EMX’s (effective) 0.418% NSR interest acquired in August 2021 (see EMX news release dated August 17, 2021), EMX now holds an effective 0.7335% NSR royalty.
Impact of Covid 19 EMX continues to monitor developments regarding the ongoing coronavirus pandemic (“COVID-19”), with a focus on the jurisdictions in which the Company operates. EMX has implemented COVID-19 prevention, monitoring and response plans following the guidelines of international agencies and the governments and regulatory agencies of each country in which it operates. EMX’s priority is to safeguard the health and safety of its personnel and host communities, support government actions to slow the spread of COVID-19 and assess and mitigate the risks to business continuity.
Royalty Generation Updates
EMX’s royalty and mineral property portfolio consists of over 272 properties in North America, Europe, Turkey, Latin America and Australia (See Figure 1). The Company’s portfolio is comprised of the following:
Producing Royalties
5
Advanced Royalties
9
Exploration Royalties
155
Royalty Generation Properties
103
Figure 1. EMX’s royalty and mineral property portfolio.
During Q1 2022, the Company’s royalty generation business was active in North America, South America, Europe, Turkey, and Australia. The Company spent $5,397,000 and recovered $2,695,000 from partners. During the quarter the Company also completed 3 partnerships across the portfolio all the while continuing to replace partnered properties with new mineral properties.
Highlights from Q1 2022 include the following:
In the US the Company added to its growing royalty portfolio with the completion of two new royalty agreements, the advancement of eight partner-funded work programs, including ongoing drill projects, and new generative work leading to new acquisitions.
In Canada, partners continued to advance the portfolio with multiple field programs, including drill programs, while EMX received $89,000 in cash payments and $Nil share equity payments.
EMX continued to expand its asset portfolio in Fennoscandia with the generation of several additional exploration properties. Nickel and other battery metals continue to be a focus of the Fennoscandia operations.
EMX’s South American royalty portfolio advanced through drill programs conducted by AbraSilver Resource Corp. Aftermath Silver Ltd, Austral Gold Ltd., and Pampa Metals Corp.
In Australia, partner Many Peaks Gold achieved a public listing on the Australian Securities Exchange (“ASX”) and commenced drilling at the Company’s Queensland Gold project with results anticipated in Q2. As per the option agreement and in connection with the initial public offering, Many Peaks Gold Pty Ltd. issued to the Company 1,175,000 shares valued at $215,000 as an option fee.
At the end of Q1, 2022, technical reports were filed for EMX’s Caserones Copper-Molybdenum Mine Royalty in Chile, EMX’s Gediktepe Polymetallic Deposit Royalties in Turkey and for EMX’s Timok Royalty in Serbia that covers the newly commissioned Cukaru Peki Copper and Gold Mine.
Financing Updates
Sprott Credit Facility The Company entered into a credit facility in Q3 2021 with Sprott Private Resource Lending II (Collector), LP (“Sprott”) totaling US$44 million (the “Credit Facility”). On January 24, 2022, the Company signed a credit agreement modification extending the maturity date to December 31, 2024. In connection with the extension, an additional 1.50% of the principal (US $660,000) was added to the principal balance as at January 24, 2022.
Private Placement with Franco-Nevada Subsequent to Q1 2022, the Company completed a $12,580,000 (US$10,000,000) private placement with Franco-Nevada Corporation (“Franco-Nevada”). The proceeds were used to acquire the additional (effective) NSR on the Caserones open pit mine in northern Chile (see EMX’s news release dated April 14, 2022).
Franco-Nevada purchased 3,812,121 units at $3.30 per unit. Each unit consisted of one common share of EMX and one warrant to purchase one common share of EMX for $4.45 exercisable until April 14, 2027. The shares issued upon closing and the shares issuable upon the exercise of the warrants will be subject to a four-month restricted resale (hold) period expiring August 15, 2022. Franco-Nevada now owns approximately 3.5% of the issued and outstanding shares of EMX on an undiluted basis.
Investment Updates
As at March 31, 2022, the Company had investments totaling $28,010,000 which included $22,808,000 in various public and private entities, and $5,202,000 in non-current investments. The Company will continue to generate cash flow by selling certain of its investments when appropriate. Much of the investment portfolio was derived from royalty deals completed as part of our organic royalty generation business.
Strategic Investment in Premium Nickel Resources Subsequent to Q1 2022, the Company completed a strategic investment in Premium Nickel Resources Corporation (“PNR”), a private Canadian company advancing nickel-copper-cobalt and platinum group element (“PGE”) projects in Botswana. EMX now owns 5,412,702 shares or 6.3% of the issued and outstanding shares of PNR having purchased an additional one million shares in April 2022. This purchase was part of a recent financing completed by PNR at US$2.00 per share.
PNR recently acquired the Selebi and Selebi North nickel-copper-cobalt mines and signed an asset purchase agreement to acquire the Selkirk nickel-copper-cobalt-PGE mine, which are located in Botswana’s prolific Selebi-Phikwe and Tati nickel mining districts. In February 2022, PNR announced the signing of a non-binding letter of intent providing for a business combination with North American Nickel, which trades on the TSX-V (NAN), as a path to go public.
OUTLOOK
The year 2022 will see an increase in revenue and other income coming from our cash flowing royalties including Caserones in Chile, Leeville in Nevada, and potentially Timok in Serbia (pending conclusion of the royalty rate discussions with Zijin). Likewise, Gediktepe and Balya in Turkey have been commissioned and are scheduled to contribute to 2022 cash flows. As in previous years, production royalties will continue to be complemented by option, advance royalty, and other pre-production payments from partnered projects across the global asset portfolio. The Company plans to give production guidance for 2022 later this year.
Subsequent to Q1 2022, EMX acquired an additional (effective) 0.3155% royalty interest on Caserones and completed a $12,580,000 (US$10,000,000) private placement Franco-Nevada and a strategic investment in PNR.
The Company will continue to strengthen its balance sheet over the course of the year by looking to retire portions of our long-term debt, continuing to evaluate equity markets (including the filing of a shelf prospectus), and the ongoing monetization of the Company’s marketable securities.
EMX is well funded to identify new royalty and investment opportunities, while further filling a pipeline of royalty generation properties that provide opportunities for additional cash flow, as well as exploration, development, and production success.
INVESTOR RELATIONS UPDATE
EMX is provided with investor relations services by Scott Close, who has provided his services from Colorado since June 1, 2007, initially as a consultant and, since Oct 1, 2010, as an employee, and by Isabel Belger, who has provided her services from Germany since January 1, 2018, as a consultant. Neither Scott nor Isabel provides their services on a fixed term basis, and EMX expects to continue to retain their services for the foreseeable future. Their services cover all aspects of liaising with shareholders and the financial investment community. The annual cost for investor relation services has been approximately US$130,000 per year over the past five years which is, has been and will continue to be paid from EMX’s cash on hand. Both have also been granted, from time to time, stock options to purchase EMX shares in accordance with EMX’s stock option plan and TSX Venture Exchange policy.
QUALIFIED PERSONS
Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on North America, Latin America, and Strategic Investments. Eric P. Jensen, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on Europe, Turkey, and Australia.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol “EMX”, and also trade on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
Forward-Looking Statements
This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended March 31, 2022 (the “MD&A”), and themost recently filed Annual Information Form (“AIF”) for the year ended December 31, 2021, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
[1] Adjusted revenue and other income, and adjusted cash provided by (used in) operating activities are non-IFRS financial measures with no standardized meaning under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-IFRS financial measures” section on page 20 of the Company’s MD&A for the three months ended March 31, 2022 for more information on each non-IFRS financial measure.
Joining us for a conversation or legendary Rick Rule of Rule Investment Media and David Cole of EMX Royalty as will discover why mineral royalties are powerful financial instruments.
About EMX Royalty: EMX Royalty Corporation has a long-standing track record of success in exploration discovery, royalty generation, royalty acquisition, and strategic investments. Our diversified, three-pronged business approach provides exposure to multiple upside opportunities while minimizing the impact on EMX’s treasury.
EMX’s business model is designed to efficiently manage the risks inherent to the minerals exploration and mining industry. Key elements and resulting advantages of our unique approach are: We organically generate royalties through low-cost property acquisition and early-stage exploration to build value, and then develop partnerships with quality companies to advance the projects, with EMX retaining a royalty interest and receiving pre-production payments. Our organic royalty growth is supplemented by purchases of royalties from other parties, as well as strategic investments. Cash flow from royalties, advance royalties, and other property payments are supplemented by returns from strategic investments and provide “self-funding” operating capital for our ongoing business initiatives. Using this model, we sustainably grow the royalty portfolio, with minimal dilution to our shareholders. EMX’s royalty and property portfolio spanning five continents and consists of a balanced mix of precious metal, base metal, and other assets.
Joining us for a conversation are two of the most prolific names in the natural resource space, both legends in their own right, as we are joined today with Rick Rule of Rule Investment Media and David Cole of EMX Royalty.
Maurice Jackson:
I must say it’s an absolute delight to be speaking with you both today, as I hold you both in the highest regard personally and professionally, as we plan to discover why mineral royalties are powerful financial instruments. We have a lot of ground to cover today, gentlemen, so let’s get to it.
Maurice Jackson:
Mr. Rule, you have a proven track record of nearly 50 years as a wealth builder for you and your clients through resource stocks. What are you seeing right now that gives you the courage and conviction that resource stocks may present a once in a lifetime opportunity?
Rick Rule:
First of all, you’re always not wise to contradict your host, but I’ve had a couple of these opportunities in my lifetime. So I don’t think it is a once in lifetime opportunity. But I, as you point out, have been lucky enough to see the opportunity before that’s in front of me now. And it was extremely pleasant to participate in. Natural resource bull markets are wonderful financial events if you participate in them early enough.
Rick Rule:
And my own belief, is that right now we are in the latter stage of the beginning of a precious metals bull market. And we’re probably in an earlier stage in a broader natural resource bull market. And the idea to participate in two real bull markets where the outcome is a probability, not a possibility, is extraordinary.
Rick Rule:
It is seldom before in my life have the fundamental factors that are in front of me come together simultaneously that has given me the courage of my convictions with regards to the probabilities of the outcome, is what I’m talking about. And that’s what feels good to me now.
Maurice Jackson:
Given the reasons you just convey to us, investors and speculators alike are seeking prudent ways to preserve their capital, and if possible, sweeten the deal with the delivery of some nice returns. About a decade ago, you introduced me a business model that offers investors both of these virtues, and I’m referring to the concept of mineral royalties. For someone new to the conversation, would you please share what are mineral royalties and why are mineral royalty companies a strategic part of your portfolio?
Rick Rule:
What I’ve learned over time is that having an economic interest in a revenue stream where my gross is my net is a very good thing. What a royalty is, is a part of the revenue stream of a mine or an oil well or something else. But you don’t bear any establishing capital risk, any sustaining capital risk or any operating cost risk.
Rick Rule:
So to the extent, as an example, that you disagree with a management team over some of their expenses, it doesn’t matter. You just get the check. Your gross is your net. A mineral royalty too is a timeless interest pretty much. And that means that most of the surprises that you can have are pleasant surprises.
Rick Rule:
If you are lucky enough to own a royalty on a tier one mineral discovery, my experience has always been that big discoveries yield surprises and small deposits yield surprises too. But big discoveries yield pleasant surprises, and small discoveries yield unpleasant surprises.
Rick Rule:
So a mineral royalty, which is established on a, let’s say, a 1 to 1.5 million ounce gold deposit, which feels attractive over 30 years might end up producing two, two and a half million dollars. The additional exploration expense that goes into establishing the lengthening of your royalty, the operating costs, the sustaining capital costs, the taxes, all that stuff doesn’t matter. Remember on a royalty for the most part, your gross is your net, which is very pleasant.
David Cole:
With regards to mineral royalties, what also comes to mind is the concept of optionality. Mineral royalties are phenomenal financial instruments, particularly in an inflationary environment, for the very reasons that you laid out and that discovery optionality and advancement of engineering techniques, all of which are multiplicative, make royalties fantastic instruments to hold.
Maurice Jackson:
And David, if you would expand on that word optionality, that may be a new term for readers.
David Cole:
Sure. So that’s the chance that things might go super well or super bad. And the couple of guys, Black Scholes got a Nobel prize for defining a formula, how to calculate what optionality is worth and options trade in the marketplace. And with respect to royalties, what we’re talking about is the chance that things can go well.
David Cole:
And as Rick pointed out, the cost that goes into the exploration and discovery work, development work, production work et cetera, et cetera, is born by the counterparty, not by the royalty holders. So we’re exposed to all that upside optionality. And that’s one of the things that makes a portfolio of royalty so powerful.
Maurice:
Mr. Cole, you’re the CEO of the royalty generator and I’m referring to EMX Royalty. Please introduce us to the value proposition that EMX Royalty presents for investors along with your current share price.
David Cole:
Well, I’m more than happy to talk about that. And first of all, it all revolves around this concept the royalties are fantastic instruments, and different royalty companies accumulate royalties in different ways. There’s royalty financings to advance mine projects. There’s purchasing of existing royalties. And then there’s royalty generation.
David Cole:
We love to generate royalties through the prospect generation business model, acquiring prospected mineral rights around the world, adding value by doing good geology and coalescing data, selling that onto an industry, hungry for discovery opportunity. And as Rick said, I’ve never seen an industry more hungry for discovery opportunity than we have today across the periodic table.
David Cole:
And we love doing that. We love selling them on for cash shares and of course, a royalty. We also buy royalties to augment that portfolio, to create that portfolio effect and to further advance the optionality.
Maurice Jackson:
And you do that organically. That’s what I find very intriguing about your business model.
David Cole:
That is our defining factor. That’s our hedgehog, and we’ve sold by example, Maurice, 83 projects in the last four years. We have track record of just selling projects right and left. And when I’m talking about selling projects, what I mean is we stake mining claims, or we acquire mining licenses from governments, add value, and then move them onto a counterparty, junior companies, and major companies.
David Cole:
And in the junior company deals, it’s commonly cash payments and share payments. We’ve done exceedingly well with the share payments over our nearly 20-year history and always a production royalty at the end. With major companies, which we also love to do business with, we’ve done six deals with Rio Tinto, the largest mining company in the world the last four years, as one example. And there, it’s more focused on the inground expenditures, cash payments, and of course the royalty at the back end.
David Cole:
And we’re just delighted to have the capital across our portfolio being expended by our counterparties, but also their expertise employed across that portfolio, which is enhancing this concept of discovery optionality, which is where the big win comes from. Of course, there’s commodity price optionality as well, which is a hot topic in an inflationary environment.
Maurice Jackson:
Now, before we delve into specific projects, multi-pronged question. Mr. Cole, how many projects are in the EMX property bank and how many of those projects are now in the harvest mode of generating royalties?
David Cole:
So when you use the word bank, that’s probably a good word to use. So we have approximately 300 mineral property positions globally, more than a dozen countries. We’ve always taken a broad approach. We’ve cast a broad net to find value, and that’s a very strong base of pyramid.
David Cole:
And then EMX does have half dozen producing assets or assets that are just about to become producing at the top of the pyramid. And we’re at the transitionary point where we’re going from a junior company that’s been building a portfolio of mineral property positions and royalties to one that has strong cash flow. And we’re right at that tipping point this year.
Maurice Jackson:
And we’re going to highlight five of those here in just a minute. Rick, in the resource space, precious metals seemed to dominate the conversation. But I’d like to get your thought on base metals and in particular, the outlook for copper.
Rick Rule:
I think the two easiest things to think about is that the driver for copper is the ascent of humankind to the extent that there are almost eight billion people on earth and more people every day. And to the extent that humankind has a responsibility, I believe, to take the poorest half of humanity and increase their wellbeing, that automatically comes to copper.
Rick Rule:
Many readers may not know that 1.2 billion people on earth have no access to electricity. And another 2 billion people on earth have access to intermittent or unaffordable electricity. We’ve done a great job as humankind the last 30 years in increasing the material a lot of the poorest of the poor. But we have a lot more to do, and an important transition from a subsistence lifestyle to a more fulfilling lifestyle, at least part of the material translation is electricity, and electricity is copper.
Rick Rule:
At the same time that we need to continue to increase access to electricity for the poorest half of humanity, the other half of humanity wants to increase their electrical consumption too electric vehicles, power, gadgets, all those types of things. All requires copper. While this happens, in other words, while demand for copper is inexorably higher and where the rate of increase is probably increasing, we have under-invested as an industry in copper exploration production for 30 or 35 years.
Rick Rule:
The truth is most of the world’s great copper mines are a bit like me. They’re old, they’re past their prime. Bingham Canyon has been producing for 120 years. Chuquicamata has been producing for 105 years. Grasberg has producing for my whole lifetime, which is to say 69 years. You don’t stand at the top of a pit, throw in fertilizer and water and have it grow more copper. That’s not the way it works.
Source: https://wikitravel.org/en/Chuquicamata
Rick Rule:
So five years from now, what you see is that these old behemoths become longer and longer and longer of tooth. While as a consequence of three decades of under investment and exploration production, there’s nothing to take their place. And if there is something to take their place, increasingly, there are political and economic roadblocks put in front of them. There’s a wonderful copper deposit here in the United States called Resolution that the world’s been talking about for 20 years. And it’s probably 10 years away from permitting and production, not in time to make any difference in a supply outlook.
Rick Rule:
So, to the extent that one is able to make a copper discovery, the appetite among the major copper producers to buy these projects, to replace the old behemoths, which are long of tooth. And the incredible interest that governments and consumers have about increasing the material wellbeing of their citizens, which is a fancy way of saying increasing demand for copper, means that an intelligently constructed copper exploration royalty development program, I say intelligently crafted. Part of the problem in the last 30 years has been that not only haven’t we invested enough money, we’ve invested most of the money that we’ve invested stupidly.
Rick Rule:
So we’ve been both unwitting and unscrupulous in the mining business with regards to copper. But the result of that is that successful efforts in the copper business pay absolutely tremendous rewards and will continue to, I think. Most people in the west when they think about copper, they think about Tesla or something like that. And that’s fine. That’s wonderful.
Maurice, I’ll point out if you don’t mind that Dr. Richard Schodde is our consulting and advisor on the mineral economic side out of Australia, MinEx Consulting. He believes that conservatively, the planet will consume as much copper in the forthcoming 20 to 25 years as has been consumed by humanity throughout all the history cumulatively.
David Cole:
And when you think about that with respect to the under-capitalized situation in the copper industry, it’s very, very dynamic situation. It’s very difficult not to be extraordinarily bullish copper. And Rick mentioned that Bingham Canyon Mine, one of the largest open pit mines in the world is where open pit mining was first invented. The globe currently consumes the entire endowment of that deposit annually. So it’s an interesting situation for the copper business.
Maurice Jackson:
Sticking with copper, Mr. Cole, let’s visit the EMX property banking, and get acquainted with some of your royalties beginning in Chile at the Caserones Mine where EMX recently increased its position there. Tell us about the royalty and why the increase.
David Cole:
So well, first of all, as said, we’re very bullish copper, have always believed in having a diversified portfolio and copper has been a key component to that. Scott Close who heads our investor relations team, likes to call Caserones, Casherones. This is a very long live asset. Officially, it’s a 17-year-mine life, but as geologists, we’ve looked at it. We see 25-plus years of production here just from the existing deposit as it is open ended at depth, and copper cutoff grades have a long history of decreasing over time because of these various factors that we’re pointing out.
David Cole:
So this is a very long lived assets. It’s like having a 30-year bond that pays in pounds of copper. And we do see a little bit of upside with respect to production coming from that, but we’re very bullish copper prices. And we did have the opportunity to buy at a fair valuation, a 0.4% royalty on that deposit. And then the opportunity came along for us to augment that as additional family members who owned this royalty wanted to sell and liquidate.
“We have under-invested as an industry in copper exploration production for 30 or 35 years”. ~ Rick Rule
David Cole:
And so we had the chance to increase that, and we did it as that next bite was larger than we could afford by ourselves. We brought in Franco-Nevada as a partner, and we have a huge amount of respect for Franco-Nevada. They’re the leader in the mining royalty space. And if you would’ve asked me who’s the best company to be a strategic investor in EMX, I would’ve said Franco-Nevada.
David Cole:
Very happy to get them across the line and become a shareholder in EMX, part and parcel to us taking that further bite and increasing our exposure to Caserones. And that’s not our only copper exposure in the world. Of course, we have a royalty on the Timok Project, which is one of the largest ongoing copper-gold discoveries on the planet.
Maurice Jackson:
Why would Franco Nevada the biggest, most successful company in the mineral royalty sector want shares in EMX?
“I think there is going to be an increasing demand for electrification for well to do people. But the real opportunity is increasing the material living standards for the bottom half of humanity. We have an obligation to do it. We’ve done a good job of it over the last three decades, it’s going to continue. And the driver is going to be copper”. ~ Rick Rule
David Cole:
And we’re delighted to have them on board. They’ve been giving us accolades for the royalty generation work for many years. We know these folks well from our history. I used to work with some of them at Newmont Mining Corporation, and they would come up to me. David Harquail once said, “Dave, we believe that your royalty generation work is topnotch and hats off to you for doing that.”
David Cole:
And ultimately, it was that that carried him across the line and got them to invest in the company. But ironically, it was associated with a royalty purchase. But Franco Nevada recognized the power and the integration of buying royalties as well as growing them organically to build your portfolio.
Maurice:
All right, I’ve thrown you some softballs here. Here’s a tough one. EMX has recently deployed a substantial amount of capital lately acquiring cash flowing and/or soon to be cash flowing royalties and taking on debt to do so. Does this really make sense in the long-term health of the company? I mean, is this really in the best interest of the shareholders?
David Cole:
Absolutely, absolutely. So, our calculated risk adjusted internal rate of return on the monies that we’ve invested into purchasing these portfolio of royalties vastly exceeds the cost of that capital. And speaking of cost of capital, one of the important goals here is to populate the top of the pyramid, increasing our cash flow, and enabling us to move across that border from a junior company to a mid-tier company with strong cash flows, which will significantly reduce our cost of capital as we able to form a relationship with major senior banks. And we’re in those discussions now.
David Cole:
So this is all part of our strategy to prudently grow our portfolio. And particularly in an inflationary environment, paying a 7% coupon rate to borrow some money to buy things that have double digit internal rates of return is smart business.
Maurice:
Rick, as a shareholder, how significant is it when you see Franco-Nevada paying a premium to own a 3.5% stake in EMX?
Rick Rule:
I like good partners. I’ve been a Franco-Nevada shareholder on and off because of course they disappeared for a while since 1982, and I hold them in very high regard. Dave has done a good job, I think, of attracting other sophisticated shareholders in EMX.
Rick Rule:
But certainly, I’m attracted to EMX as a shareholder. What price they paid is really a matter of their own concern, the fact that they paid a premium. I think if you look at the nature of the royalty transaction, the premium was explained.
“That’s what separates us from the crowd. And that’s why we’re the only junior or mid-tier royalty company that Franco Nevada has ever bought stock in and hold stock in currently“. ~ David Cole
Rick Rule:
But the truth is that in Franco-Nevada, EMX has a partner that should they have an opportunity that is time sensitive and attractive, they have a partner that could stroke a $250 million check or a $350 million check overnight without blinking an eye. And a partner that has the sophistication and the courage to be able to do that, that’s what’s important.
Maurice:
Rick, we just highlighted copper. What is your outlook on the opportunity before us in nickel?
Rick Rule:
Well, nickel, you could also say is also an electric metal. It’s in tighter supply than copper. Most of the marginal nickel production that we’ve seen in the world in the last 30 years is lateritic nickel, which is nickel that occurs in tropical environments, often Indonesia and the Philippines. And the production of lateritic nickel is extremely environmentally degrading and also extremely energy intensive. So you need to break down nickel between lateritic nickel and primary sulfide deposits.
Rick Rule:
Primary nickel sulfide deposits are very rare and extraordinarily valuable. A primary nickel mine, even at today’s nickel, makes an awful lot of money. In the very near term, the nickel price looks inexorably higher because the world’s most important nickel producer is Russia. The political difficulties between Russia and the rest of the world, including the fact that because Russia has been kicked out of the SWIFT banking systems means that even if they sell nickel, they can’t get paid for it in any currency that they can spend.
Rick Rule:
But looking beyond that, the uses of nickel in batteries, in stainless steel, in metallurgical applications, nickel is tied very, very directly like copper to the ascent of humankind. But primary nickel deposits are even rarer than high-quality primary copper deposits.
Maurice Jackson:
David, about two weeks ago, EMX announced that it had made a strategic investment in privately held Premium Nickel Resources, which holds a trio of defunct nickel, copper and cobalt mines in Botswana of all places. Now, this seems to be a big deviation from the EMX business model. What’s going on there?
David Cole:
Well, it’s actually a key part of our business model to make strategic investments. And so it’s quite synergistic with our royalty generation work. We’ve got smart economic challenges around the world, identifying properties to acquire. And occasionally, they come across an opportunity to invest in a company where we cannot, not buy the stock.
David Cole:
And you may recall the investment that we had in Russia of all places, that we liquidated at a substantial profit. That was a strategic investment in an ongoing copper and gold development story. We did exceedingly well on and happy to have our money out of Russia back in 2018 and have not gone back, I’ll point out.
David Cole:
But that’s an example of us making strategic investments. Our track record over a nearly 20-year pathway here has been quite good. We’ve netted out over 50 million USD from our strategic investments. And we’ve had a couple bumps on the chin. We’re comfortable with taking risk and the wins have far outweighed the losses.
David Cole:
This is our next major strategic investment, absolutely delighted for the very reasons that Rick pointed out to have that nickel exposure. And we think that the premium nickel asset in Botswana is going to be in the top five nickel sulfide systems on the planet. We’re very bullish about that opportunity.
Maurice Jackson:
Multimillion dollar question here, can you provide us with an update on the situation with Zijin Mining in Serbia at the giant Timok copper-gold mine?
David Cole:
Everybody wants to know the answer to that. Of course, I can selectively disclose information, but I can say that we are in negotiations with Zijin. They’ve been quite professional and communicative to work with, and I’m confident that we’ll come to a mutual agreement.
Maurice Jackson:
All right. The Balya silver-lead-zinc mine in Turkey, it’s been ramping up for a while now. What’s the latest there?
David Cole:
So the exploration results have been phenomenal. The deposit continues to grow. They’ve decided that they will build a second mill, which we’re delighted that will substantially enhance our cash flow long-term. And they are entering into commercial production now. I expect the first royalty check to come in within the next couple of months, actually. And I do expect production to ramp up from multiple underground headings over the course of the next five years. Five years from now, it’s going to be a substantial annual royalty for us.
Maurice Jackson:
Can you give us an update on the Gediktepe gold oxide and polymetallic mine? And when will this royalty start cash flowing?
David Cole:
That one’s also just a couple months away, Maurice. And so that’s an interesting royalty in that the royalty on the upper oxide zone, which is gold and silver enriched, is 10%. That was part of the sales price when the predecessor to SSR sold that on to the current operator, Lidya, and that 10% kicks in after 10,000 ounces have been poured. And we’re right at 4,000 ounces right now. They are in production, they’re placing ore on the pad. They did have a tough winter season, so that slowed them down a little bit, but they’re only a few weeks behind.
David Cole:
And we’re seeing greater in production as they head into summer. As soon as they cross the 10,000th ounce, which will be just a few months out, probably June or July, then we’ll start to receive royalty payments on that, and that is a 10% royalty. And that’s on the upper oxide zone, which we believe will have about a five-year mine life. And then it goes into the polymetallic sulfide zone, which is dominated by zinc and copper, two commodities we love. And that’s a 2% royalty in perpetuity on that zone.
David Cole:
So that’s another key asset within the portfolio that starts to cash flow in a few months.
Maurice Jackson:
Now that 10% is just remarkable. With all the new royalty cash flow and pending royalties poised to begin paying, what will the cash flow look like for EMX for the remainder of 2022?
David Cole:
Yep. So we will be coming out with guidance in two quarters, and we’re diligently working on that. And our bankers are talking to us about that. And that’s part of our shelf filing that we’re also in the process of, and this is all part of our maturing from a junior company that’s been building a portfolio to a mid-tier company with strong cash flows. And so, as soon as we provide that guidance, Maurice, you’ll be one of the first to know.
Maurice Jackson:
Right, looking forward to it. Leaving the property bank, Rick, I know you have a very stringent, selective criteria for companies that make the grade, if you will, before you will commit your capital. Now, we just heard Mr. Cole referenced that EMX has five attractive royalties and more on the way along with an attractive share price, in my opinion.
Maurice Jackson:
That all sounds compelling, but you taught me years ago that the competitive advantage for a shareholder is found in the board of directors, management, and technical team. Why are the people equally, if not more, important to you as a shareholder than the given project, and specifically the team that comprises EMX royalty?
Rick Rule:
Bad people can screw up good rocks. If the wrong team controls the cash flow, they get it and the shareholders don’t, simple as that. The second thing of course, is that luck favors the trained observer. And you need luck in exploration. Dave has done a great job over 20 years. He’s a geologist himself, but I would say his true talent is hiring and motivating and keeping very good geologists.
Rick Rule:
So, what has always attracted me to EMX has been the technical IQ per dollar of market cap. The fact that although the team has done a decent job of buying royalties, what I think the real secret sauce is the fact that they have generated royalties by generating 300 exploration concepts that other people have bought into. It can take a decade for prospect generation to work for you. But prospect generation, in my own portfolio, has been by far the most capital efficient exploration speculation that I have done. What the EMX team did is they figured out a better payments mechanism.
Rick Rule:
For most of my life, I invested in teams that had great intellectual capital that generated projects, and they ended up getting a carried interest in the project. The problem with that is that they sometimes didn’t have the ability to carry the load as the project went into production. And well, they had a lot of exploration expertise, they maybe didn’t have construction or development expertise.
Rick Rule:
What David did is he really simplified the way they got paid. Rather than get paid in the ability to own on a subsidized basis, a minority interested in operation that they may not know how to operate, he developed a circumstance where they got paid a carried interest by way of a royalty, which is ultimately a safer and probably a more valuable instrument.
Rick Rule:
The same intellectual capital that he has hired and deploys in the exploration business can be used to both source and evaluate either merchant banking opportunities, which is to say those companies that he invests in strategically or royalties. So I think it’s important that the exploration IQ that has been assembled within EMX turns out to be a strategic advantage in moving their asset base forward.
Maurice Jackson:
Now, Rick, we’ve heard you convey the merits of owning mineral royalties, and we’ve heard the virtues that EMX royalty presents to the market. Before we close, what did I forget to ask?
Rick Rule:
Well, I think, the important question to ask any company that’s beginning to mature is how are the capital allocation decisions made. What would be as, an example, the capital cost assumptions around the debt that they took on and what sort of pro forma delta would occur between cost of capital to return on capital employed? How strategically will the decision be made internally as to whether to emphasize the merchant banking business, the royalty generation business, or the royalty acquisition business?
Rick Rule:
And then finally, I think, the royalty acquisition business is extremely competitive. I would ask Dave to describe the competitive advantage that he may feel against the 30-some odd other players in the mineral royalty space.
Maurice Jackson:
All right, Mr. Cole. So, you know what’s up for our next interview.
David Cole:
It boils down to our alpha, which is on the technical side. And we believe that astute business decisions are rooted in solid technical understanding. And we’ve always had a strong technical team here at EMX to drive those business decisions so that we can have that astute allocation of capital.
Maurice Jackson:
Last question for you, Rick, tell us about the Rule Symposium, which will be held this year at the beautiful Boca Raton Resort in Boca Raton, Florida, July 26th through the 29th.
And I thought you’d never ask, Maurice. As both of you know, or all of you, frankly, to have put on natural resource investing conferences, the majority of those, the live ones took place in Vancouver, BC. A couple years ago because of COVID, we had to discontinue that one for a while. And we’d like to bring it back to BC, but the truth is with the COVID circumstance and public health administrations and two countries doing their level best to thwart my franchise, we decided to bring the conference down to the United States because most of the attendees are, in fact, American.
Rick Rule:
We searched around the country for a resort that was of the same quality that we expected, and one that had the facilities that we needed. And we found one in Boca Raton. The Boca Resort has a long and fabled history. It’s just undergone a spectacular renovation. They put hundreds of millions of dollars in it. They’re renting rooms to our attendees for $295 a night. Their rack rate is about a thousand, truly spectacular location.
Rick Rule:
The conference itself has a long and storied history. We’ve always had great speakers. We have Jim Rickards, Danielle DiMartino Booth, Doug Casey, the normal sort of gurus. But what’s always made our conference set apart is really two things. One, we have always had what I call the living legends, which is to say, we’ve always had the speakers, people who have built multi-billion dollar businesses in natural resources from scratch. It isn’t all gurus. There’s a lot of jockeys there and they are great jockeys. We’ll have that this year.
Rick Rule:
In addition to that, every exhibitor at our conference is owned either in Sprott managed accounts or in my own account. That doesn’t mean sadly that every stock I own goes up. What it does mean is that my attendees can rest assure that every exhibitor has been vetted. We know them well enough that we in fact, own them.
Rick Rule:
The important part of a live conference is that you get to see the interaction between the exhibitors and the speakers. I remember four years ago, I guess in Vancouver, following at a discreet different distance, Robert Friedland, one of the best resource entrepreneurs in history. And I watched him walk around the exhibit hall. I watched him speak to exhibitors. I took note of which exhibitors he talked to and which exhibitors made him smile and which exhibitors made him frown. I think the opportunity to follow Robert Friedland on a resource stock shopping trip is worth the price of admission.
Rick Rule:
By the way, with regards to the price of admission, every investment product, every investment education product that Rule Investment Media has ever offered over the last 30 years has come with a complete money back guarantee. If you come to the conference, you pay the tuition, and you don’t think it was worth your money? Email me. I’ll give you your money back.
Maurice:
One important factor that maybe you forgot to highlight there is the intellectual capital that you get from other investors. And the lifelong relationships that I’ve had an opportunity to forge has just been, I can’t put a price tag on that.
Rick Rule:
Oh, that’s a very good point. There’s going to be 500 high net worth investors there. And the idea that all the IQ in the room flows from the dais to the room is stupid. Watching fellow investors, listening to the questions that they ask the exhibitors, listening to the questions and the conversations they have amongst each other, listening to the conversations in the workshop, absolutely invaluable. And as I say, if you aren’t prepared to make money on it, there’s a money back guarantee.
Maurice:
Now I know the next question everyone has is how do I register? We’ve got that taken care of for you CLICK HERE. Check the description box below. Also, just visit www.provenandprobable.com. And the link will be on the right side of our homepage just below the weekly precious metal special through Miles Franklin Precious Metals Investments. Mr. Cole, before we close, what would you like to say to shareholders?
David Cole:
Buy the depths, yeah. As Rick likes to say, you want to use the cycles to your advantage rather than be used by the cycles.
Maurice:
Mr. Cole, for someone that wants to learn more about EMX royalty, please share the website address.
Vancouver, British Columbia–(Newsfile Corp. – April 20, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (“EMX”) is pleased to announce a strategic investment in Premium Nickel Resources Corporation (“PNR“), a private Canadian company advancing nickel-copper-cobalt and platinum group element (“PGE“) projects in Botswana. EMX owns 5,412,702 shares or 6.3% of the issued and outstanding shares of PNR, having recently purchased an additional one million shares as part of a US$17.5 million financing completed by PNR at US$2.00 per share.
PNR recently acquired the Selebi and Selebi North nickel-copper-cobalt mines and signed an asset purchase agreement to acquire the Selkirk nickel-copper-cobalt-PGE mine, which are located in Botswana’s prolific Selebi-Phikwe and Tati nickel mining districts, respectively (see Figure 1). The combined Selebi-Phikwe and Tati districts were a leading producer of nickel and copper from initial production in 1972 through closure of the mines at a time of low nickel prices in 2016. PNR intends to modernize and revitalize the mines it recently acquired and further evaluate the exploration potential within the project areas.
In addition to the recent asset acquisitions, in February PNR signed a non-binding letter of intent with North American Nickel Inc. (“NAN“) providing for a business combination of PNR and NAN which would be effected as a reverse takeover (“RTO“) (see NAN News Release dated February 17, 2022). The RTO will provide a public listing and near-term liquidity for PNR shareholders. NAN currently owns 8.9% of PNR, with a warrant to acquire an additional 15% of the equity in PNR (the “Warrant“). As a result of the RTO transaction, PNR shareholders will hold approximately 75% of the outstanding common shares of the resulting issuer, with NAN’s shareholders holding the remaining 25% and NAN’s Warrant would be extinguished. The RTO transaction is subject to shareholder and regulatory approvals1.
Selebi Phikwe District. The metamorphosed magmatic sulfide nickel-copper-cobalt deposits of the Selebi Phikwe District are located in the Limpopo Mobile Belt of northeastern Botswana. The deposits were discovered in the early 1960’s, with mining operations commencing in 1972 and continuing through 2016. Together with its concentrator and smelting facilities, the Selebi-Phikwe District became one of world’s premier nickel mining complexes in the 1970’s and 1980’s. Operational inefficiencies, issues with the smelting complex, and low nickel prices led to closure of the mines in 2016. The mines and mining complex were operated by BCL Limited (“BCL“) and were subject to a recent liquidation process.
Two of the principal mines in the district, Selebi and Selebi North, have been acquired by PNR (See NAN News Release dated February 10, 2022), both of which include substantial underground infrastructure (shafts, rail, power and water) and unmined historical resources. PNR is currently conducting exploration and engineering programs as part of a redevelopment plan that has been approved by the liquidators of BCL and the Botswana government.
Tati Mining District. The Tati Mining District is located 75 kilometers north of Selebi-Phikwe, near Francistown. Several mines occur in the district, including the Phoenix open pit nickel-copper mine and the nearby underground Selkirk nickel-copper-PGE mine. High grade nickel-copper-PGE mineralization was mined at Selkirk between 1989 and 2002 and direct shipped to the BCL Smelter at Selebi-Phikwe. A former owner of the Selkirk Mine, Norilsk Nickel Ltd, advanced the project to the feasibility stage and was preparing Selkirk as an open pit mining operation when it sold the mine to BCL in 2014.
Similar to the BCL assets at Selebi-Phikwe, assets of the Tati Nickel Mining Company were included in the recent liquidation process, which included the Selkirk Mine. PNR recently signed an asset purchase agreement with the liquidator to acquire the Selkirk Mine (see NAN News Release dated February 14, 2022) and has been conducting metallurgical tests and resampling of historical drill core.
PNR Activities at Selebi and Selkirk. The acquisition of the Selebi, Selebi North and Selkirk Mines by PNR followed an extensive period of evaluation, due diligence and data compilation and negotiations for acquisition of the assets. Proposed work by PNR at Selebi and Selebi North includes exploration drilling of prioritized geophysical targets, metallurgical and engineering studies, and upgrading of underground infrastructure. Proposed work at Selkirk will include continued metallurgical studies, exploration programs to update historical resources, and environmental studies.
Importantly, PNR is planning to design its own processing plant infrastructure and tailings facilities at Selebi and Selkirk which will be spatially and operationally independent of the historical concentrator plants and smelting facilities at Phikwe. Upon commencement of production, PNR intends to produce both copper concentrate and nickel-cobalt concentrate products for sale.
As a strategic shareholder, EMX has maintained an active dialog with the management team at PNR and has made site visits to the project areas. EMX looks forward to continuing its active relationship with the resultant issuer following completion of the RTO.
In recent years, EMX began seeking strategic investment and royalty generation opportunities in nickel and associated battery metal elements such as cobalt and PGE’s. EMX’s investment into PNR is another example of this approach and provides EMX with additional commodity diversification and exposure to the battery metals market.
Comments on nearby mines and deposits. The nearby mines and deposits discussed in this news release provide context for PNR’s assets, which occur in a similar geologic setting, but this is not necessarily indicative that the PNR properties will host similar mineralization.
Dr. Eric P. Jensen, CPG, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed, verified and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and the TSX Venture Exchange under the symbol EMX, and also trade on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@EMXroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@EMXroyalty.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the year ended December 31, 2021 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2021, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Figure 1. Location map for the Selebi-Phikwe and Tati Mining Districts in Botswana.
1 Investors are cautioned that there can be no definitive assurances that the RTO transaction will be approved and closed, or that the indicative terms specified by PNR and NAN will ultimately be adopted.
Vancouver, British Columbia–(Newsfile Corp. – April 14, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (“EMX” or the “Company”) is pleased to announce that it has acquired an additional (effective) 0.3155% Net Smelter Return (“NSR“) royalty on the Caserones Copper-Molybdenum Mine located in northern Chile for US$25.74 million. When combined with EMX’s 0.418% NSR interest acquired in August 2021 (see EMX news release dated August 17, 2021), EMX now holds an effective 0.7335% NSR royalty. Franco-Nevada Corporation (“Franco-Nevada”) has concurrently acquired a 0.4582% (effective) NSR royalty on similar terms.
Since acquisition, Caserones has generated pre-tax cash flow to EMX in Q2, Q3 and Q4 of fiscal 2021 totalling $3.6 million from EMX’s effective 0.418% interest. As part of the royalty purchase, EMX will receive royalty distributions covering Q1 of fiscal 2022 for the additional interest acquired.
To finance its purchase of the additional NSR royalty, EMX has agreed to complete a private placement with Franco-Nevada for C$12.58 million (US$10 million). On completion, Franco-Nevada will own approximately 3.5% of the issued and outstanding shares of EMX on an undiluted basis. EMX is delighted to have Franco-Nevada as a shareholder.
Caserones Overview. The Caserones open pit mine is developed upon a significant porphyry copper-molybdenum deposit in the Atacama Region of the northern Chilean Andean Cordillera, 162 kilometres southeast of the city of Copiapó. The mine is operated by SCM Minera Lumina Copper Chile SpA (“Minera Lumina”), which is owned by JX Nippon Mining & Metals Corporation.
Caserones produces copper and molybdenum concentrates from a conventional crusher, mill and flotation plant, as well as copper cathodes from a dump leach, solvent extraction and electrowinning plant. In 2020, the mine produced 104,917 tonnes of fine copper in concentrate, 2,453 tonnes of fine molybdenum in concentrate, and 22,056 tonnes of fine copper in cathodes (results for 2021 have not yet been released by Minera Lumina). The Caserones open pit has operated with an average waste to ore strip ratio of 0.47, has an estimated 17 years remaining in its current mine plan (as at year-end 2020), along with excellent exploration potential.https://embed.fireplace.yahoo.com/embed?ctrl=Monalixa&m_id=monalixa&m_mode=document&site=sports&os=android&pageContext=%257B%2522ctopid%2522%253A%25221542500%253B1577000%2522%252C%2522hashtag%2522%253A%25221542500%253B1577000%2522%252C%2522wiki_topics%2522%253A%2522Franco-Nevada%253BRoyalty_payment%253BShares_outstanding%253BCalifornia%253BCompany%253BPrivate_placement%2522%252C%2522lmsid%2522%253A%2522a0V0W00000HOPDcUAP%2522%252C%2522revsp%2522%253A%2522newsfile_64%2522%252C%2522lpstaid%2522%253A%2522238b4c30-4b4b-3615-902e-17d479fd2222%2522%252C%2522pageContentType%2522%253A%2522story%2522%257D
Acquisition Details. The Caserones mine is subject to a 2.88% NSR royalty created in a 2009 agreement between SCM Minera Lumina Copper Chile S.A., as purchaser, and Compañía Minera Caserones (“CMC“) and Sociedad Legal Minera California Una de la Sierra Peña Negra (“SLM California“), as vendors. CMC and SLM California originally acquired the mineral concessions that overlie the Caserones deposit. Ownership of the 2.88% NSR royalty is currently divided between CMC (32.5%) and SLM California (67.5%). SLM California’s sole purpose is to distribute its royalty income to its shareholders as dividends and pay Chilean taxes on its income.
EMX has purchased today a further 16.23% of the shares of SLM California for US$25.74 million pursuant to share purchase agreements with existing shareholders of SLM California.
Private Placement. Franco-Nevada will purchase 3,812,121 units at C$3.30 per unit for total proceeds of C$12,580,000. Each unit will consist of one common share of the Company and one warrant to purchase one common share of the Company for five years at an exercise price of C$4.45. The shares issued upon closing and issuable upon the exercise of the warrants are and will be subject to a four-month restricted resale (hold) period. Proceeds from the placement totalling C$12,580,000 will be used towards the acquisition of the additional Caserones (effective) royalty interest.
Qualified Person. Eric P. Jensen, CPG, a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and an employee of the Company, has reviewed, verified, and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol EMX, and also trade on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@EMXroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@EMXroyalty.com
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding completion of the transactions, perceived merits of properties, exploration results, budgets and potential, estimated mine life, mineral reserves and resource estimates, timelines, strategic plans, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential”, “upside” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors. It is possible EMX may not complete the transaction, as a result of failure to fulfill conditions of closing, unavailability of financing or for other reasons EMX cannot anticipate at this time.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the year ended December 31, 2021 (the “MD&A”), and the most recently filed Annual Information Form (the “AIF”) for the year ended December 31, 2021, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Vancouver, British Columbia–(Newsfile Corp. – April 1, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9)(the “Company” or “EMX”) is pleased to announce the filing of its 2021 annual report Form 40-F, which includes the audited financial statements for the year ended December 31, 2021 with the U.S. Securities and Exchange Commission (“SEC”) on EDGAR (www.sec.gov). EMX has also filed its Annual Information Form (AIF), audited Financial Statements (FS), and Management’s Discussion and Analysis (MD&A) for 2021 with Canadian securities regulators on SEDAR (www.sedar.com). The Company’s Form 40-F, AIF, audited FS, and MD&A are also available on EMX’s website at www.EMXroyalty.com under the heading “Investors”. Shareholders may receive a printed copy of the Company’s complete Financial Statements, or its complete Annual Information Form, free of charge, upon request to the Corporate Secretary at Suite 501 – 543 Granville Street, Vancouver, British Columbia V6C 1X8, Canada. All dollar amounts in this news release are CDN unless otherwise noted.
HIGHLIGHTS FOR 2021
Financial Updates for the Year Ended December 31, 2021
Adjusted royalty and other income1 of $12,446,000 (2020 – $7,199,000) included $3,012,000 (2020 – $Nil) in income from the effective Caserones copper royalty interest in Chile.
Royalty generation costs of $18,155,000 (2020 – $16,392,000) of which the Company recovered $8,661,000 (2020 -$7,962,000) from partners.
General and administrative costs totaled $5,600,000 (2020 – $5,172,000). Impacting general and administrative costs were higher professional fees and consultants associated with our two acquisitions, capital raises, and the Bullion Monarch litigation in the US.
Share-based payments totaled $5,216,000 (2020 – $3,121,000) including $1,537,000 (2020 – $1,127,000) included in royalty generation costs (above) which was an increase over the prior year primarily resulting from additional stock option grants and the fair value of restricted share units (“RSUs”) which vested during the year.
Finance expenses of $2,666,000 (2020 – $Nil) associated with the Sprott Credit Facility and the SSR VTB note.
Loss from operations of $12,586,000 (2020 – $9,623,000), and loss for the year of $29,749,000 (2020 – $6,007,000).
Adjusted cash used in operating activities1 of $7,739,000 (2020 – $8,961,000).
Significant items affecting the loss for the year ended December 31, 2021 included $10,496,000 (2020 – $Nil) of impairment charges, primarily taken against the Rawhide investment, unrealized fair value losses on investments of $6,278,000 (2020 – gain of $6,162,000) and foreign exchange adjustments of $4,969,000 (2020 – $177,000).
As at December 31, 2021, EMX had cash and cash equivalents of $25,218,000 (December 31, 2020 – $52,418,000), investments, non-current investments and loans receivable valued at $23,069,000 (December 31, 2020 – $26,126,000) and loans payable of $64,418,000 (December 31, 2020 – $Nil).
Corporate Updates
Acquisition of SSR Royalty Portfolio EMX closed the acquisition of a portfolio of royalty interests and deferred payments (the “Royalty Portfolio”) from SSR Mining Inc. and certain of its subsidiaries (“SSR Mining”) (see EMX news release dated October 21, 2021). The Royalty Portfolio consists of 15 (previously disclosed as 16, but the Company now considers Gediktepe to be one royalty covering both the oxide phase as well as the sulfide phase) geographically diverse base and precious metals royalties including a producing royalty at the Gediktepe polymetallic volcanogenic massive sulfide (“VMS”) deposit in Turkey, four other advanced stage projects in Turkey, Peru, Chile and Argentina, and 10 early-stage royalties in Mexico, Canada, Chile, Argentina and the US. The Company also expects to receive US$18 million in future cash payments (of which US$2.25 million was received in Q4 of 2021) associated with two properties in South America. EMX paid US$33 million in cash and issued 12,323,048 common shares of the Company valued at US$32.5 million to SSR Mining to acquire the Royalty Portfolio. SSR Mining now owns an approximate 12% undiluted equity interest in EMX. The Company will also make deferred and contingent payments to SSR Mining of up to US$34 million if certain project advancement milestones are achieved associated with the Yenipazar project in Turkey.
Acquisition of Caserones Royalty EMX completed the acquisition of an effective 0.418% NSR royalty on the Caserones Copper-Molybdenum Mine (the “Caserones Royalty”) located in northern Chile for US$34.1 million in cash (see EMX news release dated September 3, 2021). Caserones is a porphyry copper-molybdenum mining operation in a top tier mining jurisdiction. Since acquisition, EMX’s Caserones effective royalty interest has provided immediate pre-tax cash flow to the Company in 2021 consisting of US$2,339,000 in distributions related to production from the mine for Q2 and Q3 2021, and US$1,228,000 received subsequently in 2022 for settlement of the Q4 payment.
Subsequent to Year End Settlement of the Bullion Litigation Subsequent to year-end, the Company’s wholly-owned subsidiary, Bullion Monarch Mining, Inc., (“Bullion”) reached a settlement with Barrick Gold Corporation (“Barrick”) and Barrick affiliates and subsidiaries (“Barrick Entities”) with respect to Bullion’s claim of non-payment of royalties by the Barrick Entities to Bullion on production from properties in the Carlin Trend, Nevada. Bullion initiated litigation in 2008, before EMX acquired Bullion in 2012. Pursuant to the settlement, Barrick paid Bullion US$18.825 million, being US$25 million as the settlement less US$6.175 million as payment of a contingency fee to Bullion’s Reno, Nevada lawyers. The settlement of the lawsuit does not affect our 1% gross smelter return royalty from portions of Nevada Gold Mine’s Leeville, Carlin East, Four Corners, and other northern Carlin Trend underground gold mining operations (the “Leeville Royalty”), which will continue to be paid.
Impact of Covid 19 EMX is monitoring developments regarding the ongoing coronavirus pandemic (“COVID-19”), with a focus on the jurisdictions in which the Company operates. EMX has implemented COVID-19 prevention, monitoring and response plans following the guidelines of international agencies and the governments and regulatory agencies of each country in which it operates. EMX’s priority is to safeguard the health and safety of its personnel and host communities, support government actions to slow the spread of COVID-19 and assess and mitigate the risks to business continuity. Most of the restrictions have been removed or relaxed in the jurisdictions where the Company operates (e.g., travel restrictions, etc.), with EMX’s field programs up-and-running at full speed.
Royalty Generation Updates
EMX’s royalty and mineral property portfolio consists of over 270 properties in North America, Europe, Turkey, Latin America and Australia (See Figure 1). The Company’s portfolio is comprised of the following:
Producing Royalties
5
Advanced Royalties
9
Exploration Royalties
157
Royalty Generation Properties
102
Figure 1. EMX’s royalty and mineral property portfolio.
In 2021, the Company’s royalty generation business was active in North America, South America, Europe, Turkey, and Australia. The Company spent $18.2 million and recovered $8.7 million from partners. During the year the Company also completed 25 partnerships across the portfolio all the while continuing to replace partnered properties with new mineral properties. In addition, our partners also directly spent US$20.6 million in exploration of the portfolio.
Highlights from 2021 include the following:
South 32 regional strategic alliance (“RSA”) in the US where EMX and South 32 are in the fourth year of exploring for copper in Arizona, New Mexico, Utah and Nevada. The RSA advanced eight copper projects through field-based work programs, drill tested one copper target, and continued to acquire new projects during the year.
Continued expansion of the gold royalty generation portfolio in the US, particularly Idaho where EMX was an early entrant and has completed nine deals over the past three years. The partnered properties are being advanced by juniors and mid-tier mining companies, including four projects that were drill tested with encouraging results during 2021.
EMX has become a preeminent generative and early-stage exploration company in Fennoscandia by acquiring significant base and precious metals project portfolios, and partnering with multiple junior companies, as well as larger mining groups such as Agnico Eagle and Boliden. The program in 2021 saw partners spend over US$8 million and drill 15,670 meters on EMX projects in Sweden and Norway.
The Company entered Canada in early 2020 with the acquisition of the Perry English portfolio for $2,991,000. Over the past two years the Company has received total cash payments of $885,000 and share equity payments valued at $273,000 while continuing to expand on the portfolio. At the time of acquisition, the royalty and mineral portfolio totaled 84 properties and is principally focused on precious metals.
The Company entered into South America in 2020 with the acquisition of Revelo Resources’ Chilean royalties. With the acquisition of the SSR portfolio in 2021, the Company continued to increase its asset base, as well as expanding the footprint beyond Chile to Peru and Argentina. The portfolio now totals 25 properties with partners exploring for copper, copper-gold, and gold mineral deposits.
In Australia, EMX expanded the portfolio by adding several new projects. While most of the portfolio is centered around gold systems, the Company continues to evaluate base metal opportunities, particularly as they relate to cobalt, copper, and nickel.
Towards the end of 2021, the Company expanded its technical team with the re-hiring of Ankara-based Dr. Mesut Soylu, who will lead exploration programs in the Balkans, central Asia, and other jurisdictions in the region.
Financing Updates
Private Placement In Q4 of 2021 the Company completed a private placement of 6,500,000 units at $3.30 per unit for gross proceeds of $21,450,000. Each unit consists of one common share of the Company and one-half of one transferable warrant. Each whole warrant entitles the purchase until November 6, 2023 to one common share at $4.00 in the first year and $4.50 in the second year.
Sprott Credit Facility In Q3 of 2021, the Company entered into a credit facility with Sprott Private Resource Lending II (Collector), LP (“Sprott”) totaling US$44 million (the “Credit Facility”). The proceeds from the Credit Facility were used to fund the acquisition of the Caserones effective royalty interest in Chile as well as provide additional capital to complete the acquisition of the SSR Royalty portfolio. Subsequent to the year ended December 31, 2021, the Company amended the Credit Facility to extend the maturity date to December 31, 2024.
SSR VTB Note As part of the acquisition of the SSR Royalty portfolio, The Company entered into a Vendor-take-back note (“VTB Note”) with SSR Mining Inc. (“SSR Mining”) pursuant to which the Company borrowed US$7.8 million from SSR Mining which was used to fund the VAT liability on the acquisition of the Gediktepe royalty in Turkey.
Investment Updates
As at December 31, 2021, the Company had investments totaling $20,530,000 (December 31, 2020 – $25,626,000) which included $15,391,000 (2020 – $16,755,000) in various public and private entities, and $5,139,000 ($8,871,000) in non-current investments. The Company will continue to sell certain of its investments when appropriate. Much of the investment portfolio was derived from royalty deals completed as part of our organic royalty generation business.
Write-Down of Investment in Rawhide The Company has a 38.07% equity interest in Rawhide Acquisition Holding LLC (“Rawhide”), a privately-held Delaware company that owns the Rawhide gold-silver mining operation in Nevada’s Walker Lane Belt. The Rawhide mine is an open pit heap leaching operation that produces and sells gold and silver. The Company’s investment at Rawhide has not gone as planned. Mining operations were suspended at year-end, and Rawhide is evaluating strategic alternatives including the sale of the company. EMX has taken a full write-down of its investment in 2021 totaling $10,014,000.
OUTLOOK
The Company completed two transformative transactions in 2021 (Caserones Royalty & SSR Royalty Portfolio), raised $21,450,000 in equity and US$51,800,000 in debt. Production was initiated at Timok and at Balya (as a result of development work), while Leeville saw improvements in production that included new sources of ore. Likewise, the Gediktepe oxide gold deposit was commissioned in Q4, 2021 and is expected to reach commercial production sometime in Q2 or Q3, 2022.
Recent events in Q1 of 2022 included extension of the maturity date on the Sprott Credit Facility from July 2022 to December 2024 and the settlement of the Bullion litigation bringing into the Company US$18,825,000.
The year 2022 will see an increase in revenue coming from our cash flowing royalties including Caserones in Chile, Leeville in Nevada, and potentially Timok in Serbia (pending conclusion of the royalty rate discussions with Zijin). Likewise, Gediktepe and Balya in Turkey have been commissioned and are scheduled to contribute to 2022 cash flows. As in previous years, production royalties will continue to be complemented by option, advance royalty, and other pre-production payments from partnered projects across the global asset portfolio.
The Company plans to give production guidance for 2022 later this year. The Company will continue to strengthen its balance sheet over the course of the year by looking to retire portions of our long-term debt, continuing to evaluate equity markets (including the filing of a shelf prospectus), and the ongoing monetization of the Company’s marketable securities.
EMX is well funded to identify new royalty and investment opportunities, while further filling a pipeline of royalty generation properties that provide opportunities for additional cash flow, as well as exploration, development, and production success.
INVESTOR RELATIONS UPDATE
EMX is provided with investor relations services by Scott Close, who has provided his services from Colorado since June 1, 2007, initially as a consultant and, since Oct 1, 2010, as an employee, and by Isabel Belger, who has provided her services from Germany since January 1, 2018, as a consultant. Neither Scott nor Isabel provides their services on a fixed term basis, and EMX expects to continue to retain their services for the foreseeable future. Their services cover all aspects of liaising with shareholders and the financial investment community. The annual cost for investor relation services has been approximately US$130,000 per year over the past five years which is, has been and will continue to be paid from EMX’s cash on hand. Both have also been granted, from time to time, stock options to purchase EMX shares in accordance with EMX’s stock option plan and TSX Venture Exchange policy.
FILING OF TECHNICAL REPORTS
EMX has filed Technical Reports for the Caserones, Gediktepe, and Timok royalty projects prepared in accordance with National Instrument 43-101 “Standards of Disclosure for Mineral Projects” of the Canadian Securities Administrators. The Technical Reports were filed on SEDAR on March 31, 2022 to coincide with the Company’s year-end 2021 AIF filing.
The Caserones Technical Report is titled “NI 43-101 Technical Report, Caserones Copper-Molybdenum Mine Royalty, Region III, Chile” and has an effective date of February 28, 2022. The Technical Report was prepared by Gregory W. Walker, Independent Consulting Geologist, SME RM. The Report discloses no material differences than previous Company disclosures for Caserones but provides additional disclosure required by NI 43-101 for a material property.
The Gediktepe Technical Report is titled “Gediktepe Project – Balıkesir Province, Turkey NI 43-101 Royalty Technical Report” and has an effective date of February 1, 2022. The Technical Report was prepared by DAMA Engineering Inc.’s Mustafa Atalay, Senior Geologist, CPG; Metin Alemdar, Senior Mining Engineer, MIMMM; Selim Yilmaz, Senior Mining Engineer, MIMMM; and Arif Umutcan Gelisen, Senior Mining Engineer, MIMMM. The Report discloses no material differences than previous Company disclosures for Gediktepe but does provide additional disclosure required by NI 43-101 for a material property.
The Timok Technical Report is titled “NI 43-101 Technical Report – Timok Copper-Gold Project Royalty, Serbia” and has an effective date of December 31, 2020 and an amended report date of March 25, 2022. The Technical Report was prepared by Mineral Resource Management LLC’s Kevin Francis, SME RM. The second amended and restated Report has no material changes from the initial amended and restated Technical Report dated July 21, 2021, and only corrects two typographical errors in table headings.
QUALIFIED PERSONS
Michael P. Sheehan, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on North America, Latin America, and Strategic Investments. Eric P. Jensen, CPG, a Qualified Person as defined by NI 43-101 and employee of the Company, has reviewed, verified and approved the above technical disclosure on Europe, Turkey, and Australia.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol “EMX”, as well as on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release
Forward-Looking Statements This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the year ended December 31, 2021 (the “MD&A”), and themost recently filed Annual Information Form (“AIF”) for the year ended December 31, 2021, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
1 Adjusted royalty and other income and adjusted cash used in operating activities are non-IFRS financial measures with no standardized meaning under IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-IFRS financial measures” section of the Company’s annual MD&A for the year ended December 31, 2021 for more information on each non-IFRS financial measure.
Vancouver, British Columbia–(Newsfile Corp. – February 18, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company“, or “EMX“) is pleased to announce that its wholly-owned subsidiary, Bullion Monarch Mining, Inc., (“Bullion”) has reached a settlement with Barrick Gold Corporation (“Barrick”) and Barrick affiliates and subsidiaries (“Barrick Entities”) with respect to Bullion’s claim of non-payment of royalties by the Barrick Entities to Bullion on production from properties in the Carlin trend, Nevada. Bullion initiated litigation in 2008, before EMX acquired Bullion in 2012. Pursuant to the settlement, Barrick will pay Bullion US$ 25 million, of which US$ 6.175 million is owed as payment of the contingency fee to Bullion’s Reno, Nevada lawyers. The settlement of the lawsuit does not affect our 1% gross smelter return royalty from portions of Nevada Gold Mine’s Leeville, Turf and other underground gold mining operations, which will continue to be paid.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol “EMX”, as well as on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@EMXroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@EMXroyalty.com
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding completion of the transaction, perceived merits of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential”, “upside” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors. It is possible EMX may not complete the transaction, as a result of failure to fulfill conditions of closing, unavailability of financing or for other reasons EMX cannot anticipate at this time.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2021 and the year ended December 31, 2020 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Vancouver, British Columbia–(Newsfile Corp. – February 17, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company” or “EMX”) is pleased to announce the execution of an agreement on February 14, 2022 to sell its Mo-i-Rana volcanogenic massive sulfide (“VMS“) project in Norway (the “Project“) to Mahvie Minerals AB (“Mahvie“), a private Swedish Company. In return for the transfer of the Project to Mahvie, the agreement provides EMX with a 9.9% equity interest in Mahvie, annual advance royalty payments, 2.5% Net Smelter Return (“NSR“) royalty interests, work commitments, and other considerations. In conjunction with the Mo-i-Rana transaction, Mahvie intends to establish a public listing on one of the Nordic exchanges. This is anticipated sometime in Q2, 2022.
The Mo-i-Rana VMS belt was acquired by EMX in 2021 (see EMX News Release dated April 6, 2021). This VMS belt is situated in central Norway and contains numerous polymetallic (zinc-lead-copper-silver-gold) occurrences and historical mines (see Figures 1 and 2). Over 200 mines and prospects with VMS and carbonate replacement (“CRD“) styles of mineralization are located within the Mo-i-Rana project area, including ten former producing mines.
EMX and Mahvie will work together to explore the Project, where considerable exploration upside exists at many of the historical occurrences and mines. Much of the historical exploration work was done at a time when VMS models were only poorly understood and only limited portions of the nine individual VMS horizons that exist in the belt have been tested to date. Additionally, most historical drilling was shallow (i.e., less than 100 meters) and clustered around the historical mine workings. EMX and Mahvie will apply modern exploration methods and deposit models to seek additional discoveries in the belt.
Commercial Terms Overview. Via an arm’s length transaction, Mahvie will acquire a 100% interest in the EMX subsidiary company that controls the Project, subject to the following terms:
Upon closing, EMX will receive 75,000 Norwegian Krone (approximately US$8,500 at current exchange rates) in cash and 9.9% of the issued and outstanding shares of Mahvie Minerals AB.
EMX will receive a 2.5% NSR royalty interest in the Project. On the sixth anniversary after closing, Mahvie has the option to purchase 0.5% of the NSR on the Project by paying EMX US$1,500,000.
EMX will receive annual advance royalty (“AAR“) payments of US$25,000 for the Project commencing on the third anniversary of the closing, with the AAR payment increasing by US$5,000 per year until reaching US$100,000.
A financial instrument will be put in place that allows EMX to maintain its 9.9% interest in Mahvie until a total of 25,000,000 Swedish Kronor (approximately US$2.7 million at current exchange rates) has been raised by Mahvie.
A payment of US$500,000, payable in cash or shares of Mahvie, will be made to EMX upon the completion of a Prefeasibility or Feasibility study.
To maintain its interest in the Project, Mahvie will also: (i) spend a minimum of US$200,000 on the Project by the first anniversary of the agreement and (ii) spend aggregate of US$1,000,000 by the third anniversary of the agreement or complete a minimum of 2,000 meters of drilling on the Project.
Mo-i-Rana VMS Belt. VMS and CRD style polymetallic deposits are developed in the Rana-Hemmes metallogenic region of Norway, which is also host to the prolific Rana Gruber iron mines as well as the nearby Bleikvassli Zn-Pb-Cu-Ag deposit, an EMX royalty property (see Figure 1). This metallogenic area represents a tectonically displaced continuation of the Cambrian-Ordovician VMS belts in northeastern North America, which includes the Buchans and Bathurst VMS camps in eastern Canada, and also the Avoca VMS district in Ireland. As such, this represents one of the more prolific VMS belts in the world in terms of total production from its various mining districts, albeit now tectonically displaced and occurring along opposite sides of the Atlantic Ocean.
The most notable historical producer within the Project area is the Mofjell Mine (the core of which remains covered by state-owned mining licenses) which produced 4.35 million tonnes at 3.61% Zn, 0.71% Pb, and 0.31% Cu from 1928-1987[1]. The deposit consists of three rod-shaped elongate VMS lenses, approximately 100 meters wide that extend for lengths of up to 2.8 kilometers. Just prior to mine closure, high gold and silver grades were discovered as disseminations in wall rocks within the historical mine workings (such as 2.8 meters averaging 3.88 g/t gold and 44.3 g/t silver in underground drill hole DD1313 and 3.7 meters averaging 2.30 g/t gold and 75.7 g/t silver in underground drill hole DD781A; true widths unknown[2]) but were never followed up[3]. This underscores the potential for additional discoveries of precious-metal enriched zones of mineralization in the belt.
In 2008, a partnership between industry, the Norwegian Geological Survey (NGU) and the local county administration was formed to investigate additional potential in the Mo-i-Rana belt. This effort generated high resolution airborne geophysical data sets, as well as district scale mapping and geochemical sampling campaigns carried out by the NGU. These represent key data sets that EMX and Mahvie intend to utilize for further advancement of the Project.
Comments on Sampling, Assaying and Adjacent Properties. Samples and geochemical assays mentioned in this news release are reported by Norwegian Geologic Survey. EMX has not performed sufficient work to verify the Project’s historical drill results or production data, but considers this information as reliable and relevant based upon the Company’s reviews of data from multiple independent sources. Additional drilling and sampling would be required to confirm these results.
The Mofjell Mine and other nearby mines and deposits discussed in this news release provide context for EMX’s Project, which occurs in a similar geologic setting, but this is not necessarily indicative that the Company’s Project hosts similar mineralization.
Dr. Eric P. Jensen, CPG, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed, verified and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and the TSX Venture Exchange under the symbol EMX, as well as on the Frankfurt Exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@emxroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@emxroyalty.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2021 and the year ended December 31, 2020 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Figure 1: Location map for the Mo-i-Rana VMS belt in Norway.
[1] Bjerkgård, et. al (2013). The Mofjell Project: Summary and conclusions. NGU (Norwegian Geological Survey) Report 2013.048.
[2] Bergverkselskapet Nord-Norge A/S, 1987. As Reported by Directorate of Mining Norway. The historical drilling was completed by Bergverkselskapet Nord-Norge A/S, 1987 and archived by the NGU. EMX believes these results to be reliable and relevant.
[3] Bjerkgård, et al (2001). Ore Potential with emphasis on gold in the Mofjellet deposit, Rana, Nordland, Norway. NGU Report 2001.050.
Vancouver, British Columbia–(Newsfile Corp. – February 10, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company” or “EMX”) is pleased to announce the execution, by its wholly-owned subsidiary Bronco Creek Exploration Inc., of an Assignment and Assumption agreement as well as a Royalty Agreement (the “Agreements”) for transfer of EMX’s Arizona State Exploration Permit (“Permit”) to Cactus 110 LLC, a wholly-owned subsidiary of Arizona Sonoran Copper Company, Inc. (“ASCU”). EMX’s Permit covers a portion of the Parks Salyer copper target, located approximately 1,500 meters southwest of the historic Sacaton open pit copper mine. Sacaton was previously operated by Asarco from 1972-1984 and is now being developed by ASCU and is known as the Cactus Project. The Agreements provide EMX with a one-time cash payment for the assignment of its rights under a State of Arizona Exploration Permit as well as a 1.5% net smelter return (“NSR”) royalty interest, work commitments, annual advance royalty payments, and certain milestone payments. EMX is pleased to see the Permit advance with ASCU as it continues to advance activities at its Cactus project.
Commercial Terms Overview. (All dollar amounts in USD) Pursuant to the Agreements, ASCU will assume all rights under EMX’s Arizona State Exploration Permit by making payments of $5,000 upon execution and $195,000 upon transfer and registration of the Permit to Cactus 110 LLC (“Registration Date”). EMX will retain a 1.5% NSR royalty interest on the Permit. ASCU may buy back one percent (1%) of the royalty for a payment of $500,000 to EMX. EMX will receive annual advance royalty (“AAR”) payments of $50,000. The AAR payments cease upon commencement of commercial production and can be bought out at any time for a payment of $1,000,000. ASCU will make milestone payments of $1,500,000 upon declaration of a mineral resource containing 100 million pounds or more of copper and another payment of $1,500,000 upon further declaration of an additional 100 million pounds of copper contained in a resource. In the two years following the Registration Date, ASCU will make yearly exploration expenditures totaling $2,000,000 prior to the first anniversary and a cumulative total of $4,000,000 prior to the second anniversary.
Parks Salyer Permit Overview. EMX’s Parks Salyer Permit is located approximately 5 kilometers northwest of the city of Casa Grande, and approximately 900 meters southwest of the historic Sacaton open pit copper mine in central Arizona. Sacaton is a porphyry copper-molybedenum deposit within the Laramide arc in the southwestern U.S. The Parks Salyer Permit is comprised of one State of Arizona Exploration Permit totaling 158 acres and covers a portion, roughly one third of the poorly drill defined Parks Salyer copper target area. The target lies beneath post-mineral gravels and contained within a fault-bounded horst block, and has potential for supergene enriched copper and hypogene sulfide mineralization. The target is supported by historic induced polarization geophysical surveys and drilling within and adjacent to the EMX royalty ground.
More information on the Parks Salyer Permit can be found at www.EMXroyalty.com.
Comments on Adjacent Properties. The nearby Sacaton mine provide geologic context for EMX’s Project, but this is not necessarily indicative that the Project hosts similar tonnages or grades of mineralization.
Michael P. Sheehan, CPG, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed, verified and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and the TSX Venture Exchange under the symbol EMX, as well as on the Frankfurt Exchange under the symbol “6E9.” Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@emxroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@emxroyalty.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2021 and the year ended December 31, 2020 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Figure 1. Location map of the EMX Parks Salyer Permit.
Vancouver, British Columbia–(Newsfile Corp. – January 27, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company“, or “EMX“) reports that it has suspended the filing of its Notice of Arbitration to Zijin Mining Group Ltd (“Zijin”) and its wholly owned subsidiary, Nevsun Resources Ltd. (“Nevsun”) pursuant to the Net Smelter Returns Royalty Agreement dated March 16, 2010 by and between Reservoir Capital Corp. (of which Nevsun is a successor in interest), and Euromax Resources Ltd (EMX is the acquirer of Euromax Resources Ltd’s royalty interest) (the “Royalty Agreement”). EMX announced its intention to file a Notice of Arbitration in its news release of December 17, 2021, as a result of a dispute with Zijin regarding the royalty rate under the Royalty Agreement described in such news release.
EMX has suspended the filing as it has commenced discussions with Zijin with the goal of reaching a mutually acceptable resolution. As the outcome of such discussions are uncertain at this stage, EMX reserves its right to protect its royalty interests as it deems necessary which may include the future filing of a Notice of Arbitration which has been prepared. However, at this time, EMX continues to pursue an amicable and mutually acceptable resolution with Zijin.
Timok Project Overview. The Timok Project’s Cukaru Peki deposit consists of a higher level body of high-grade, epithermal-style copper-gold mineralization referred to as the Upper Zone project, and a deeper body of porphyry-style copper-gold mineralization known as the Lower Zone project. Prior to its acquisition by Zijin, a Pre-Feasibility Study (“PFS”) of the Upper Zone and resource estimate of the Lower Zone was completed by previous owner Nevsun, which was filed in August 2018 under Nevsun’s profile on SEDAR. EMX used the aforementioned PFS as the basis for its NI 43-101 Technical Report – Timok Copper-Gold Project Royalty, Serbia dated July 30, 2021 and EMX is unaware of any new, publicly available material scientific or technical information that would make Nevsun’s previous disclosures regarding the PFS inaccurate or misleading.
Eric P. Jensen, CPG, a Qualified Person as defined by National Instrument 43-101 and an employee of the Company, has reviewed, verified, and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and TSX Venture Exchange under the symbol EMX, as well as on the Frankfurt exchange under the symbol “6E9”. Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@EMXroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@EMXroyalty.com
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements include statements regarding the payment of the royalty under the Royalty Agreement, the royalty rate, the outcome of any discussions, dispute or arbitral proceedings between EMX and Zijin and any other steps or actions taken by EMX to protect its rights, including any future filing of the Notice of Arbitration,, perceived merits of properties, exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential”, “upside” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. We are under no obligation to update any forward-looking statements except as required under applicable securities laws. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2021 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Vancouver, British Columbia–(Newsfile Corp. – January 26, 2022) – EMX Royalty Corporation (NYSE American: EMX) (TSXV: EMX) (FSE: 6E9) (the “Company” or “EMX”) is pleased to announce the execution, by its wholly-owned subsidiary Bronco Creek Exploration Inc., of an exploration and option agreement (the “Agreement”) for the sale of the Robber Gulch gold project (“Project”) in Idaho to Ridgeline Exploration Corporation, a wholly-owned subsidiary of Ridgeline Minerals Corp. (TSX-V: RDG) (“Ridgeline”). The Agreement provides EMX with cash payments, share payments, and work commitments during Ridgeline’s earn-in period, and upon earn-in a retained 3.25% net smelter return (“NSR”) royalty interest, annual advance royalty payments, and certain milestone payments.
Robber Gulch is a Carlin-style gold property acquired by EMX in 2019 and then optioned to a third party in 2020 that completed work programs consisting of geological mapping, soil and rock chip geochemical sampling, trenching, and a reconnaissance drill program. This previous work confirmed several key gold zones that were delineated by coincident geochemical anomalies and prospective geology. The drill testing was limited in scope and in EMX’s judgement did not adequately test the target zones. The Project reverted back to 100% EMX control in Q3, 2021.
The Robber Gulch Agreement with Ridgeline represents EMX’s execution of the seventh option agreement for Idaho gold projects since 2020. Ridgeline is also advancing the Company’s Swift and Selena royalty properties in Nevada. Robber Gulch is a key example of the royalty generation aspect of EMX’s business model, whereby prospective ground was identified, acquired inexpensively via staking open ground, and then partnered for exploration advancement at no additional cost to EMX.
Commercial Terms Overview. Pursuant to the Agreement, Ridgeline can earn 100% interest in the Project by (all dollar amounts in USD): (a) making execution and option payments totaling $750,000 over a five year option period, (b) delivering 150,000 shares of Ridgeline Minerals Corp. to EMX by the second anniversary of the Agreement, and (c) completing $650,000 in exploration expenditures before the fifth anniversary of the Agreement.
Upon Ridgeline’s option exercise and earn-in, EMX will retain a 3.25% NSR royalty interest on the Project. Ridgeline may buy back up to a total of one percent (1%) of the royalty by first completing an initial half-percent (0.5%) royalty buyback for a payment of $1,500,000 to the Company prior to the third anniversary of the option exercise. If the first buyback is completed, then the remaining half-percent (0.5%) of the royalty buyback can be purchased anytime thereafter for a payment of $2,000,000 to the Company. Ridgeline will also make annual advance royalty (“AAR”) payments of $50,000 that increase to $75,000 upon completion of a Preliminary Economic Assessment (“PEA”) or internal study termed an Order of Magnitude Study (“OMS”), the details of which are defined in the terms of the Agreement. The AAR payments cease upon commencement of commercial production. In addition, Ridgeline will make Project milestone payments consisting of: (a) $250,000 upon completion of a PEA, (b) $500,000 upon completion of the earlier of a Prefeasibility or Feasibility Study, and (c) $1,000,000 upon a positive Development Decision.
Robber Gulch Overview. The Robber Gulch Project is located 30 kilometers south of Burley, Idaho and consists of 117 unpatented lode mining claims covering approximately 9.3 square kilometers. Carlin-style mineralization is hosted in Pennsylvanian to Permian age silty limestones and calcareous siliciclastics that are exposed within erosional windows beneath post-mineralization volcanic rocks. The Robber Gulch geological environment is similar to that at the Black Pine project ~90 kilometers to the southeast.
Previous work on the Project defined two main corridors of gold mineralization along the crest of a gently sloping ridge where prospective Paleozoic host rocks outcrop. Much of the remainder of the property is covered by shallow soil. A 2020 geochemical sampling program (conducted by previous partner Gold Lion Resources) identified robust 1,000 by 550 meter and 850 by 600 meter gold-in-soil anomalies1. Numerous lower level gold-in-soil anomalies are scattered across the property within an overlying sequence of less prospective host rocks.
Trenching across portions of the soil anomalies further defined priority oxide gold targets, including a trench interval of 189 meters averaging 0.43 g/t gold, with a higher grade sub-interval of 0.88 g/t gold over 45 meters. Historical drilling intercepted 57.9 meters (from 21.3 to 79.2 m) averaging 0.34 g/t gold, including 12.2 meters averaging 0.90 g/t gold (hole bottomed in 0.32 g/t gold)2. The last hole of Gold Lion’s 2021 program terminated prematurely in bedrock at 6.1 meters depth, and averaged 1.46 g/t gold across the drilled interval. True widths from the trenching and drilling are unknown.
EMX regards Robber Gulch as a highly prospective gold property within an emerging Carlin-style gold region in southern Idaho. The Company looks forward to the Ridgeline team advancing the Project with the knowledge gained from successfully exploring Carlin-style gold systems in Nevada.
Comments on Sampling, Assaying and Adjacent Properties. EMX has not performed sufficient work to verify the Project’s historical drill results, but considers this information as reliable and relevant based upon the Company’s independent field work and reviews of data from multiple sources.
The geochemical and trench results in this news release from previous partner Gold Lion Resources were sampled and assayed according to industry standard procedures, and reported according to NI 43-101 requirements. EMX believes that these results are reliable and relevant. All trench samples were logged and sampled by Gold Lion personnel. Certified reference material standards, blanks and pulp duplicates were inserted at a ratio of approximately two in every 10 trench samples. Rock samples were collected as continuous 2 to 3-metre-long chip samples along the entire length of the trenches. An effort was made to collect an even volume of bedrock along each interval in order to minimize bias in the chip sampling.
All rock samples were sealed in poly bags and were transported to MS Analytical’s laboratory in Langley, B.C., by Gold Lion personnel for preparation and analysis. Sample preparation was completed by crushing the entire sample to 70% passing -2mm, riffle splitting off 1 kilogram and pulverizing the split to better than 85% passing 75 microns. Using a 30 gram sub-sample, the gold values are determined by the fire assay method, with atomic absorption finish (code FAS-111), which reports results in parts per million (ppm) (equivalent to grams per tonne (g/t)). Using a 0.5 grab sub-sample, the remaining analytes were determined by multi-element ICP-AES with an aqua regia digest (code ICP-130). Representative samples from RG-TR-20-03 were re-analyzed by Cyanide Leach (code AU-CN00) with a AAS finish. A range of samples from low (0.149g/t) to high grade gold (1.502g/t Au; determined by FAS-111) were selected to represent a range of mineralized samples from the trenching program for reanalysis by Cyanide Leach. All analytical results are verified with the application of industry standard Quality Control and Quality Assurance (QA-QC) procedures.
The Black Pine project referenced in this news release provides context for EMX’s Project, which occurs in a similar geologic setting, but this is not necessarily indicative that the Company’s Project hosts similar tonnages or grades of mineralization.
Michael P. Sheehan, CPG, a Qualified Person as defined by National Instrument 43-101 and employee of the Company, has reviewed, verified and approved the disclosure of the technical information contained in this news release.
About EMX. EMX is a precious, base and battery metals royalty company. EMX’s investors are provided with discovery, development, and commodity price optionality, while limiting exposure to risks inherent to operating companies. The Company’s common shares are listed on the NYSE American Exchange and the TSX Venture Exchange under the symbol EMX, as well as on the Frankfurt Exchange under the symbol “6E9.” Please see www.EMXroyalty.com for more information.
For further information contact:
David M. Cole President and Chief Executive Officer Phone: (303) 973-8585 Dave@emxroyalty.com
Scott Close Director of Investor Relations Phone: (303) 973-8585 SClose@emxroyalty.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This news release may contain “forward-looking statements” that reflect the Company’s current expectations and projections about its future results. These forward-looking statements may include statements regarding perceived merit of properties, exploration results and budgets, mineral reserve and resource estimates, work programs, capital expenditures, timelines, strategic plans, market prices for precious and base metal, or other statements that are not statements of fact. When used in this news release, words such as “estimate,” “intend,” “expect,” “anticipate,” “will”, “believe”, “potential” and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company’s future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and factors may include, but are not limited to: unavailability of financing, failure to identify commercially viable mineral reserves, fluctuations in the market valuation for commodities, difficulties in obtaining required approvals for the development of a mineral project, increased regulatory compliance costs, expectations of project funding by joint venture partners and other factors.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release or as of the date otherwise specifically indicated herein. Due to risks and uncertainties, including the risks and uncertainties identified in this news release, and other risk factors and forward-looking statements listed in the Company’s MD&A for the quarter ended September 30, 2021 and the year ended December 31, 2020 (the “MD&A”), and the most recently filed Revised Annual Information Form (the “AIF”) for the year ended December 31, 2020, actual events may differ materially from current expectations. More information about the Company, including the MD&A, the AIF and financial statements of the Company, is available on SEDAR at www.sedar.com and on the SEC’s EDGAR website at www.sec.gov.
Figure 1. Location map of the Robber Gulch Project, Idaho.
Note: Soil, rock chip and trench results are from Gold Lion Resources. Annotated drill hole intercepts are historical. True widths for trench and drill results are unknown.
1See Gold Lion Resources news releases dated June 16, and August 11, 2020. 2 Exvenco Resources Inc., 1986, Internal Report on Artesian City Project, Cassia County, Idaho.
